MADRID | The Corner | 2014 is not being a good year for LatAm. All countries in the region with the exception of Colombia have experienced much softer than anticipated growth. In Brazil, the political noise and uncertainty have impacted on the confidence and private activity in 1H201, with investments and private consumption leading the way down. UBS analysts see now Brazil’s real GDP growth at 0.6% in 2014 and 1.5% in 2015.
BERLIN | Alberto Lozano | Some figures were already announcing during the last weeks that Germany was losing momentum. Its equity market also was the 3rd worst performer since the European market peaked on June 10th, so the GDP fall of 0.2% in the largest economy of the Euro area is not a surprise. A negative effect from the balance of exports and imports and a fall in construction are the main causes for this slight GDP decrease. However, both households and government consumed slightly more than in the previous quarter. Therefore, growth in consumption and imports might be a positive signal for the Europe’s largest economy in the coming quarters of 2014.
MADRID | The Corner | From the macroeconomic side, US data are showing a clear improvement in the economy, with the labor market growing at similar rates to those seen prior to the financial crisis and consumer confidence surging in July to the highest level since October 2007. The business results also show a positive trend with growth in earnings by 12.0% (ex-financials) and +10.0% inc. financials.
SAO PAULO | By Marcus Nunes via Historinhas | NGDP and RGDP trends are rather similar in both countries. The main question is: Why is the UK´s labor market so much more exuberant?
ATHENS | Via Macropolis | Unpaid private debt in Greece is estimated to have reached around 160 billion euros, which corresponds to 88 percent of GDP, but was largely ignored until the last few days, when it became a key issue in the discussion between the government and the troika. Apart from the outstanding amount, the dynamic, which clearly shows a steady upward trend, is also a worrying factor.
MADRID | By Carlos Díaz Güell | Spain’s GDP growth in 1Q14 (0.4% on a quarterly basis and 0.5% year on year) was backed by an increase in the national demand (1%), which was boosted by an atypical upturn of the public consumption. Meanwhile, the external sector moved away from the upward trend that had been following in the last few years which was affecting growth.
MADRID | Bankinter Analysis | 3Q Perspectives. Economic cycle speeds up and, mostly, gains soundness and reliability. Global growth will consolidate in 2014/2015 by +3%/+4% with positive news for developed countries and less favorable surprises in emerging markets. Japan and India are the exception to this rule. Spain will also amaze and main economic risk will lie in regional regional integrity issues whose aftermath may be undervalued, regardless the final scenario.
MADRID | By Luis Arroyo | What good does it do a falling debt if nominal GDP is increasing? According to the Real World Economy in Greece, the households’ debt went as shown in the chart. That is, the nominal value of the existing debt has dropped, but it has increased in relation to the income or the GDP with which it is paid. And this, ladies and gentlemen, is the best expression of the Debt Deflation concept.
ZURICH | By UBS analysts | The economic recovery in the Eurozone remains on track, but Q1 GDP data have once again shown the slow pace of growth and wide discrepancies that exist between individual economies. We cut our 2014 Eurozone growth forecast to 1.0% (from 1.1%) and continue to project 1.5% growth for 2015. Nominal GDP growth is expected to pick up to 1.7% this year and 2.7% in 2015, but nonetheless, it remains much slower than would be desirable to accelerate debt deleveraging
BARCELONA | Joan Tapia| That the Spanish economy grew by 0.4% quarterly in the 1Q14, and by 0.6% yearly is a real green shoot. After several years of recession, GDP is to grow moderately, around 1% in year 2014. However, employment continued falling by 184,000 people, at an annual pace of 0.5%. A slap in the face for those who told the recovery was more intense than expected.